Customers choose their top life assurer

Metropolitan has come out tops as the life assurer providing the greatest customer satisfaction among South African policy holders.

The latest South African Customer Satisfaction Index (SAcsi) for life assurance, based on a survey conducted by managing consultancy firm Consulta, reported South African life assurance customers are the most satisfied with Metropolitan’s offering.

Metropolitan scored 82.6 index points, with the company having consistently improved its score over the past three years, having climbed from 81.4 in 2016 and 74 in 2015.

Old Mutual scored 80.3 (up 2.3 points), Liberty scored 78.1 (up four points), while Sanlam and Momentum scored 77.5 points each (up 2.6 and down 1.8 points, respectively). Discovery was bottom of the list with 74 points, down a point since 2016.

Now in its fifth year, the SAcsi Benchmark for Life Insurance offers impartial insights into the South African life assurance industry by "blending a Customer Expectations Index, Perceived Quality Index and a Perceived Value Index to achieve an overall result out of 100".

South Africa’s top six assurers featured in the index: Metropolitan, Discovery, Old Mutual, Liberty, Momentum and Sanlam. The sample comprised 2 460 customers, who were randomly selected for the survey, which took place last year.

Professor Adré Schreuder, the chief executive of Consulta, says there isn’t a wide gap between the leaders and the laggards in this category, compared with other industries in the index. “In other sectors, such as short-term insurance, medical insurance and retail banking, the difference in satisfaction is much more varied, as customers deal with the services more frequently and would be more cognisant of poor service.”

Schreuder says there has still been a consistent improvement in the service quality of companies such as Metropolitan and Old Mutual, leading to their high scores, while Discovery, on the other hand, fell short in perceived quality and value, leading to it falling short on meeting demanding customer expectations.

He says that while Metropolitan customers preferred the in-branch, face-to-face experience and made enquiries more often, Discovery customers preferred to be served electronically online and through apps. “Metropolitan customers believe that the assurer offers them the best product that meets their specific needs, and delivers on the promises made,” he says.

The average customer loyalty across the industry recovered slightly with a score of 69.5, having dipped to 67.6 in 2016 from a high of 73.6 in 2015. The current economic climate has placed pressure on South African households and therefore some assurers are predicting an increase in policy cancellations. However, those who remained have a low price-increase tolerance of 66.3, meaning they may cancel their policies should there be any increases in cost relative to value.

The index also showed that Metropolitan enjoyed the highest customer loyalty score of 72.9, an increase from 68.5 in 2016. Momentum’s loyalty score was in line with the industry at 69.6, Old Mutual and Sanlam each scored 68, followed by Liberty with 67.7 and Discovery with 64.5.

Schreuder said it was interesting to see that while Metropolitan’s number of complaints was above the industry average, it also had the best complaint handling. “They turned the tide of criticism into an opportunity to show customers that they care about them.”

He added that an important metric for insurance providers was the net promoter score (NPS), which measures the likelihood that customers will recommend a brand to their family and friends, becoming promoters, compared with customers who would actively discourage a relationship with an insurer, known as detractors.

According to the index, Metropolitan is the only brand to have consistently increased its NPS since 2014, having seen a massive jump from 34 percent in 2015.

Reflecting their preparation for regulatory changes, the life assurers were measured against the six principles of the Treating Customer Fairly (TCF) regulatory framework. The score measures the perception of customers on how well financial services providers have incorporated TCF outcomes and a more customer-centric approach into their products and services.

For the past five years, the index showed a significant statistical correlation in perceived fairness and customer satisfaction, with Metropolitan the highest performer in this metric, with a TCF score of 85.8 compared with an industry average of 81.1, while Discovery had the lowest score of 76.

Schreuder says there was very little differentiation in the type of life cover offered by each of the life insurers. “The difference lies in the quality of customer experience and the level of engagement each brand provides,” he says.